Running an e-commerce business is a real challenge. Anyone with a good idea and minimal financial capital can operate on the Internet. But it’s not easy. The market is becoming very competitive and customers have high expectations.
To survive in this competitive environment, you need to invest in website optimization. The effectiveness of the campaign will be indicated by the value of the conversion rate.
For any marketer or online store owner, conversion optimization is a big challenge. There are many myths surrounding it. In this article, you won’t find them. Instead, we’ll explain what the conversion rate is, how to measure it, and why you should care about it at all.
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Why It's Important
A good CRO agency improves the performance of web pages. It does this by increasing the chances of converting visitors. Yet to be present online you must first of all be able to deliver a quality website with quality content. And you should know when to review the conversion rate optimization strategy. This is important to increase sales.
For most marketers, CRO means increasing the number of leads flowing from their sites. And of course, they’re right! If you have 10,000 users per month and a 1% conversion rate, you’re recording 100 conversions. If one conversion is worth $1,000, your monthly revenue is $100,000.
If you increase the conversion rate to 1.5%, you will gain 150 conversions/customers/sales/inquiries. That means you will earn $50,000 more. You have 50% more conversions and at the same time, you increase your revenue by 50%. This is the first and most obvious reason why you should work on your website conversion rate.
Conversion Rate Optimization (CRO) is a major issue for companies. Especially now in the age of increasing digitalization.
CRO improves the performance of web pages. It does this by increasing the chances of converting visitors. Yet to be present online you must first of all be able to deliver a quality website with quality content. And you should know when to review the conversion rate optimization strategy. This is important to increase sales.
For most marketers, CRO means increasing the number of leads flowing from their sites. And of course, they’re right! If you have 10,000 users per month and a 1% conversion rate, you’re recording 100 conversions. If one conversion is worth $1,000, your monthly revenue is $100,000.
If you increase the conversion rate to 1.5%, you will gain 150 conversions/customers/sales/inquiries. That means you will earn $50,000 more. You have 50% more conversions and at the same time, you increase your revenue by 50%. This is the first and most obvious reason why you should work on your website conversion rate.
Lead generation is essential, but there’s more to it than that. In this article, we’ll show you why the conversion rate is a key metric for any online business. You’ll understand why you should invest in optimizing it.
What is a conversion?
For Google, the concept of conversion is an action that is:
- Desired by the site owner
- Performed by a user who came to the site through a search engine or advertisement
For example, we can consider a sale to be the desired action. But conversion can be perceived from a slightly broader perspective too. It includes all activities of users which are beneficial for the website owner. And those which bring the user closer to achieving the goal for which the website exists.
What does desired activities mean for the website owner? Each entrepreneur should have a list of activities considered a conversion. These may include, among others:
- Buying a product/service
- Posting comments or online reviews of a product
- Sharing an article on social media sites
- Creating an account on the website
- Filling in a contact form
- Providing an email address
- Placing an order above a certain amount
- Visiting a subpage of the website considered crucial by an entrepreneur
- Downloading an application, free e-book, or advertising materials
Conversion Rate Optimization
An investment in online marketing must pay off in the form of conversion profit. Measures to achieve this come under one name: conversion rate optimization.
It’s not enough to advertise in Adwords. Even the highest number of visits per day from search engine optimization (SEO) will not help. Neither will a million likes on Facebook. Even with a great social media marketing campaign. None of this will matter if there’s no real conversion.
In contrast to traditional marketing, digital marketing is a quantifiable activity. You can study its effects in great detail, analyze, and compile a wide range of data. Optimizing your conversion rate will convert this data into money. Which makes CRO an essential digital marketing tool.
How to increase the conversion rate on a business website
What exactly is conversion rate optimization? There’s no single answer. Optimization is unique to the website and the nature of the e-business. It’s usually equated with working on the UX and UI of a website. But this is an oversimplification.
Optimization may include such elements as:
- UX and UI of the website
- Customer path
- Website graphics
- Content marketing - type, language, and content of texts on the page
- The usefulness of the website in the after-sales service process
- Fill-in forms
- Operation of sales, payment, or reservation systems
It’s worth remembering that the above actions are not universal. We use conversion rate optimization tools. Google makes it easier to conduct tests by releasing a free tool: Google Optimize. With its help, it’s possible to conduct A/B and multivariate tests.
What happens when the website generates traffic but conversion rates are low?
An SEO strategy is on the roll, the design is flawless, and there are many website visitors on the site. Yet, the results are not there, and the bounce rate is very high.
Visitors enter a page and leave it without visiting the others. Users visit a landing page and never make it to the checkout process. Cart abandonment is rampant. This is where CRO comes in!
To avoid this situation, companies can use a heat-map solution. This provides a visual representation of activity. You can see the clicks and scrolls of existing website traffic over a period of time.
It gives you a picture of customer experience. Thus, you can analyze and understand the interactions on the page. And it’s possible to determine where the most abandonment occurs.
The user journey goes through a funnel analysis. This provides a detailed overview of how users leave one web page and move on to others. Identifying the ones they abandon most often helps you pinpoint areas for improvement.
Why is the conversion rate worth improving?
It’s very important to improve conversion rates. Conversion optimization maximizes the chances that website visitors will buy a product/service. If the website doesn’t convert, it doesn’t generate revenue. Think about what you can change on the website. With a little changeup, you can make quality traffic convert to concrete actions.
To improve site conversion rate, you should first of all focus on the usability of your website. Hone your efforts on the right customer at the right time and in the right place. You want to reach your target audience.
Online users appreciate saving time and keeping things simple. Making the desired action intuitive is the first step towards positive changes. Unique product descriptions will also be valuable for users. A live chat option also increases engagement to help you go beyond the benchmark.
The benefits of conversion rate optimization are many. They define the basic business goals of each company. Here are seven of them.
REASON #1: CRO helps you see more clearly where your website is lacking
You can only use intuition and assumptions at the time of the website design. It’s important to challenge your ideas. Accept that your expectations aren’t always in line with reality. The heat-map test will help to:
- Understand how website visitors interact on a web page
- Which parts generate the most clicks
- Which parts don’t get the attention they deserve
If visitors aren’t going where you expect them to, change the design of the page to counteract this trend.
REASON #2: CRO is the best way to increase profits
The overarching goal of your business website is profit. You can increase it in three ways:
- Get more users
- Increase the conversion rate
- Increase the customer lifetime value
The vast majority of companies opt for website traffic acquisition strategies. They invest their budget in very expensive marketing and advertising campaigns. But there’s one problem there. If your website is ineffective, bringing in traffic may turn out to be throwing money down the drain.
It’s a waste of time and money. Better brand awareness and a good value proposition won’t matter so much without CRO. You can focus on analytics and attracting more mobile users. But it won’t bring the results you’re looking for without an effective average conversion rate.
Conversion rate optimization experts use the analogy of a leaky bucket. You can pour twice as much water into it, but it’s no use until you plug the holes. Marketing efforts that make the most of existing traffic can be more cost effective. Conversion optimization is an essential piece of an effective digital marketing strategy.
REASON #3: CRO gives you continuous results
Let’s give a simple example here. You have 10,000 monthly users, a 1% conversion rate, and one conversion is worth $1,000. You want to increase your revenue by $50,000. That is, get 50 extra conversions for your e-commerce website.
Let’s assume that you pay $2,000 for 5,000 extra users. To gain 50 conversions every month for a year, you have to spend 12 times $2,000, which is $24,000. So every month you’re investing a certain amount of money to gain extra traffic.
But what if you use up your budget in one month? You’ll be back to 100 conversions per month. Which means you won’t be able to reach your goal. But if you invest three months of your traffic acquisition cost (i.e., $6,000) in CRO, the results will be more consistent.
The achieved conversion rate won’t change for the following months. And every month, you’ll get 50 more conversions!
By investing once, you get a steady increase in revenue from month to month for your ecommerce site. That means you save 75% of the money you would’ve invested to get the same result. You can use this savings for other marketing activities such as social media ads.
Reason #4: CRO drives a very large part of extra revenue into profit
During conversion rate optimization, you incur almost no extra costs. Except, of course, for the cost of the conversion rate optimization project itself.
CRO causes a very large part of extra revenue to go to profit. This is because some of the costs are already fixed (promotion, overhead). The only cost that goes up is your own sales expense. And you don’t spend an extra dollar on advertising.
Conversion rate optimization increases the competitiveness of your business permanently. As a result, it increases your sales margin in the long term.
Reason #5: CRO increases the competitive advantage of your website
Sure, you can enter the race with your competitors and spend more and more money on user acquisition. But don’t kid yourself. This battle can cost you a lot of money in the long term and you aren’t guaranteed to win anyway.
By optimizing your conversion rate, you can outperform your competition. This is because you won’t invest a fortune in expensive traffic acquisition. Is your conversion rate significantly higher than your competitors’ rates? They can get up to twice as much traffic on their sites and you’ll still generate more sales and valuable leads.
Another competitive advantage is the continuous growth process. You can create it by combining a CRO strategy with traffic acquisition.
- 1. A higher conversion rate gives you a higher margin.
- 2. You can spend more money on user acquisition (e.g., SEO or PPC campaigns).
- 3. You can outperform your competition by spending more on traffic acquisition.
When companies take advantage of CRO, they have a competitive advantage over individual keywords (SEO and PPC).
And that’s not all. Are you basing your marketing on affiliates? Then CRO is a great way to drive interest from your affiliates and get them to link to your sites. Are you billing your affiliate sites on a per conversion basis? Then there’s no doubt that they’ll be more willing to work with you than with someone who has a lower conversion rate.
It’s simple. Affiliates can expect to make more profit by sending the same number of visitors to your site.
Reason #6: CRO saves money in the long term
Money invested in on-page conversion rate optimization yields a steady return. Let’s say you increase the conversion rate by 10%. Every month the store gains 10% more conversions without generating any extra traffic.
Once you increase the conversion rate, the cost of customer acquisition goes down. For the same ad spend, you can get more customers. This means that for every penny you invest in SEO and attracting extra traffic, you’ll earn more profit.
You can invest in extra promotion channels, which were unprofitable before optimization. For example, sometimes online stores want to advertise for competitive words in Adwords. Before conversion rate optimization, such advertising was unprofitable. But it can change with conversion rate optimization.
Reason #7: CRO lets you redesign your website without risk
Conversion rate optimization can help you avoid a redesigning nightmare. Website redesigns are usually long, tedious projects. They consume a lot of time and resources.
The scenario is usually similar. Big changes often end up exceeding deadlines and budgets. Redesigns need the collaboration of several departments, design teams, and outside companies. They involve a lot of money and expectations that are hard to meet.
What’s worse, redesigns often lead to drops in conversion rates. But it doesn’t have to be that way. Opt for continuous conversion rate optimization instead of abrupt, one-off redesign projects.
CRO is the process of testing and making small changes to your site. It increases your conversion rate in the long term. You don’t take any risk or upset the user experience. Thanks to A/B testing and static relevance, you know whether your online users convert better or not. It’s pure science.
In the case of a classic redesign, you’d get a drop in the conversion rate of the website. This means that you’d lose the chance to make some good changes. Does your website need a refresh, but you don’t want to get into another web redesign? Opt for small, constant changes and split testing.
An updated website is an attractive website
If you haven’t updated your web design for a long time, it’s time to think about it. It doesn’t take much to disappoint a potential customer. It’s easy to divert their attention to a competing site.
Google gives a higher search priority to sites based on recency and relevance. That’s why it’s important for a brand’s web page to be well updated and to follow the trends to stay competitive. A good content writer and SEO still make an impact. It’s also a good idea to ensure your webpage works well on a mobile device.
Are you trying out different versions and experimenting with them before launching? That’s also a pragmatic and wise way to go about it. Adding customer testimonials, focusing on your brand image, and using new photos--these are all factors that will help inspire trust among Internet users.
Want to increase your profit by boosting your conversion rate?
We hope you’re now convinced that CRO will not only increase sales and leads, but it’ll also positively impact your business in other ways. You get a steady increase in revenue, and a large part of that revenue goes to profit.
Implementing the right process will allow you to outperform your competitors. Even in traffic acquisition! And on top of that, you don’t run the risk of a failed redesign, which can result in a drop in conversion rates.
There’s no better way than CRO to:
- Improve conversions
- Improve site performance
- Increase sales, transactions, or leads
All that without spending another dollar on traffic acquisition.
It’s not that you shouldn’t budget to get new users. Or that you shouldn’t spend to increase customer lifetime value. It’s just that the conversion rate is crucial to your website’s success. And you might not be taking advantage of its possibilities for revenue growth.
CRO is an effective internet marketing tool you can’t afford to ignore. There’s no time to waste. Start optimizing your conversion rate and increase your site’s profits now!
Get in touch!
Are you thinking about starting a conversion rate optimization process for your business? Want to increase revenue and profits without spending another penny on traffic acquisition? Contact us. We’re not a SaaS company, we’re a solution.
We’ll tell you about our approach. We guarantee a higher conversion rate for your website.
Are you getting started with an e-commerce company? Do you want to make your idea for an online store a reality? Let us know. We love to tackle new challenges!
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